INTRODUCTION 3


Indian/Asian or African) and into independent and nonindependent home- lands (see Chapter 2). In the post-apartheid regime, discriminatory and seg- regating barriers that prevented African children from entering other schools were discontinued. Yet in reality schools attended primarily by white children have maintained their superior quality over those attended by Africans. In spite of institutional reform, economic and spatial divides between whites and others have not changed significantly, and this reality is reflected in the education system. It is an urgent challenge to guarantee Africans access to quality education in the public system.3


Among the nations of the world, South Africa is ranked among the highest in terms of income inequality; its Gini coefficient is around 0.6. Given the difficulty in redistributing physical and financial assets, such as land, to Afri- cans by drastic means, the formation of human capital in majority Africans appears to be one of the most feasible methods for improving equity in the society.4 Regarding returns to education, the next section discusses features specific to the South African labor markets.


Human capital has several unique features. First, as already discussed, human capital directly improves individual earning capacity. Therefore, the formation of human capital among Africans would be expected to increase their earnings.


Second, through the public education system, the government is expected to progressively help the poor. Equal access to quality education plays a cru- cial role in guaranteeing this outcome.


Third, social returns are often larger than private returns. Externalities may arise from the accumulation of human capital in an economy, with human capital embodied in certain individuals augmenting that in others. This effect may also enhance the performance of the economy over the long run. Fourth, and most importantly, the formation of human capital in a dis- advantaged group builds new assets for that group. This strategy is entirely different from the redistribution of assets, in which certain assets are forcibly taken away from their owners. To secure equity in a society, a human-capital- based strategy is much less politically sensitive than one based on asset redistribution.5 However, this strategy also has costs regarding the time that may be required for human capital investment to have an impact. It often


3 This problem is different from that addressed by affirmative action, which seeks to guarantee


equal opportunities to a minority group within a population. 4 In the author’s opinion, the inheritance tax should be systematically reformed so as to reduce nonlabor income components inheritable from the present generation to future generations.


This channel will also increase the market supply of inheritable assets. 5 A good example of the latter strategy is provided by Indonesia, where by presidential order oil surpluses in the 1970s were used to construct schools on a massive scale.


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92  |  Page 93  |  Page 94  |  Page 95  |  Page 96  |  Page 97  |  Page 98  |  Page 99  |  Page 100  |  Page 101  |  Page 102  |  Page 103  |  Page 104  |  Page 105  |  Page 106  |  Page 107  |  Page 108  |  Page 109  |  Page 110  |  Page 111  |  Page 112  |  Page 113  |  Page 114  |  Page 115  |  Page 116  |  Page 117  |  Page 118  |  Page 119  |  Page 120  |  Page 121  |  Page 122  |  Page 123  |  Page 124  |  Page 125  |  Page 126  |  Page 127  |  Page 128  |  Page 129  |  Page 130  |  Page 131  |  Page 132  |  Page 133  |  Page 134  |  Page 135  |  Page 136  |  Page 137  |  Page 138  |  Page 139  |  Page 140  |  Page 141  |  Page 142  |  Page 143  |  Page 144  |  Page 145  |  Page 146  |  Page 147  |  Page 148  |  Page 149  |  Page 150